Mobile Entrepreneurs: Social Networking Good, Carriers Bad

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On Monday night Orange Labs Boston (which is actually in Cambridge) hosted the fall’s first Mobile Monday Boston event, the Beantown version of a tradition that began in Helsinki, Finland, in 2000 and has now spread to 50 cities around the world. A panel on social networking applications led by Orange Labs’ director of commercial development, Jason Karas, attracted an overflow crowd to Orange’s architectural-award-winning “imaginarium” space, where giant video screens showed clouds billowing against an alternately baby-blue and hellish-red sky. The animation seemed an apt metaphor for the panelists’ own alternating optimism and pessimism about consumer uptake of their services for connecting people through mobile devices.

At least two of the panelists, Siegel and Hansson, reported encouraging results among their target audiences. MocoSpace has picked up more than a million registered users in the last year, and Nokia’s MOSH (not to be confused with a rumored Yahoo social network of the same name) has reached 25,000 registered users in only its second month of beta testing.

But the main theme of the evening seemed to be frustration with the mobile carriers, the 800-pound gorillas of the mobile industry, who still retain the keys to mobile-software gold by determining how much cellular subscribers must pay for data access and restricting which programs get placed on the “decks” or main operating-system screens of their phones. Without access to the deck and the licensing revenues that can come with it, companies like Padpaw are dependent on expensive marketing or word-of-mouth to reach users, and must turn to advertising for revenue, meaning they have to figure out how to serve up ads without interfering with the information customers really want. “Nobody wants to get an ad via text-message,” Padpaw’s Erskine said. “It’s a challenge for us right now.”

(In an interesting aside, Erskine said that Padpaw relies on kids, much more than their parents, to understand and drive adoption of its messaging system, which the is designed for coaches and other people who need to get the word out quickly in cases such as weather-related game cancellations. “Kids totally get it, so we get the kids to teach the parents how to use the service,” Erskine said.)

Siegel, a veteran of mobile entertainment companies JSmart and SkyZone, said he and MocoSpace co-founder Jamie Hall developed their current venture specifically to be “less reliant on the carriers” than their previous services. The company subsists on ads served alongside mobile content—and in fact, no one on the panel disagreed that advertising, rather than subscriptions or revenue-sharing with carriers, would have to be the main business model for providers of mobile social networking services.

Karas asked the panelists for their wish lists for the future of the mobile industry. Erskine said it would be ideal for Padpaw’s users if every cellular provider introduced an inexpensive, $5-a-month unlimited data plan. Krikorian asked for “better APIs” or application programming interfaces, the toolkits that outside software developers use to build programs that interact with the carrier deck. Siegel asked for “better access to the decks.”

All the criticism of the carriers led to a few uncomfortable moments for Karas himself, who was forced to defend to Orange’s own restrictive practices. (While virtually unknown to consumers in North America, the France Telecom subsidiary is one of the world’s largest mobile carriers, with some 190 million customers.) “We have an extremely valuable storefront that we’ve spent $100 billion building, and we’re not going to let just anyone put their products on our shelves,” Karas said. On the other hand, he said Orange believes it is a “critical” priority to open up its APIs. “We want to create an enabling platform. The carrier that wins is going to be the carrier that finds ways to engage innovators.”

Wade Roush is the producer and host of the podcast Soonish and a contributing editor at Xconomy. Follow @soonishpodcast

Especially with the introduction of wi-fi, many carriers, i believe are going to be unpleased with the growth of mobile socail networks. Its going to cause a loss for carriers in the long run. places like twitter and peekamo will transform the text messaging scene.